Qualcomm fined almost €1bn by EU over Apple chip deal

The European Commission today fined Qualcomm €997 million for abusing its market dominance in LTE baseband chipsets. The Commission cites an agreement with Apple, where Qualcomm paid money to Apple on the condition they would only use Qualcomm chips for their iPads and iPhones.

The fine represents 4.9% of Qualcomm’s annual turnover in 2017, according to the EU.

Qualcomm abused its dominant market position

Commissioner for Competition Margrethe Vestager stated that “Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance.”

The Commission points to an agreement with Apple, signed in 2011, which committed Qualcomm to make significant payments to Apple on the condition that it would exclusively use Qualcomm chipsets in iPhones and iPads. The deal was later extended to the end of 2016.

If the agreement was breached, Qualcomm would cease their payments, and Apple also would have had to return to Qualcomm a large part of the payments it had received in the past.

“No rival could effectively challenge Qualcomm in this market, no matter how good their products were. Qualcomm’s behaviour denied consumers and other companies more choice and innovation — and this in a sector with a huge demand and potential for innovative technologies.” Vestager said.

There was no evidence of wrongdoing on the part of Apple, the Commissioner said.

Fine to be appealed by Qualcomm 

Qualcomm mentioned in a statement that they will appeal the fine, and that it “strongly disagrees with the decision.”

“We are confident this agreement did not violate EU competition rules or adversely affect market competition or European consumers” Don Rosenberg, executive vice president and general counsel of Qualcomm stated.

This follows other companies, like Intel and Google, who have also appealed the fines they received from the European Commission.

 

Image source, European Commission

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